Deutsche believes GM close to strategic alternative for GMAC

NEW YORK (MarketWatch) -- Deutsche Bank analyst Rod Lache believes General Motors
GM, -2.45%
may be close to de-linking its GMAC financing arm, based on Standard & Poor's actions on Monday. S&P downgraded GM to BB-, now 3 notches below investment grade, from BB, but left GMAC's rating at BB and changed to outlook to watch developing. "We believe this unwillingness to downgrade GMAC indicates that GM may be near a feasible 'strategic alternative' to bolster GMAC and reduce its funding costs," Lache said. To de-link GMAC, Lache feels GM would have to either limit dividends to the GM parent, initiate a partial equity sale and set up a independent GMAC board of directors. GM shares closed Monday down $2.81, or 9.9%, at $25.48.

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